Controversial colliery to use ‘significantly less’ water

Coal of Africa chief executive John Wallington said the group’s controversial Vele colliery, located 6km from Mapungubwe National Park and World Heritage Site, would have “the most monitored water use licence in the country”.

Vele’s water-use licence is valid for five years

He was responding to an announcement last week by a coalition of civil society groups that they would take a Department of Water Affairs decision to grant a water-use licence for Vele on appeal at the water tribunal. Coal of Africa intends to defend the appeal.

The NGOs are also appealing Vele’s mining right and environmental management plan with the Department of Mineral Resources. At the same time, Vele is undergoing a “rectification process” after Coal of Africa was served with a compliance notice in August by the Department of Environmental Affairs to stop construction of the colliery.

News of the water use licence approval immediately pushed Coal of Africa’s shares 14 percent higher on the JSE when the announcement was made to shareholders last Monday, but the counter had lost about half of these gains when it closed at R9.42 on Friday.

“The terms and conditions are going to be very specific for this mine,” Wallington said of the Vele water licence. “Once, and if, we get approval to run, we need to earn the right to stay there.”

He could not say what volumes Vele was licensed to use, although he indicated it was “significantly less” than a previous farm allocation on the land on which the mine was located.

Vele would initially use “substantially lower” volumes than the authorised offtake. “Production will be kept at a very low point until we’re sure where we’re going,” he said.

The litigants opposing Vele said Coal of Africa’s estimates of demand for groundwater were inconsistent and too low to adequately control dust.

Coal of Africa denied this, saying a detailed water-balance “compiled by specialist experts” included water demand for dust suppression.

The Department of Water Affairs said in a statement last week that Vele’s water-use licence was valid for five years from the date of issue on March 29, but would be reviewed after the first year and thereafter every two years.

It had “considered carefully all aspects relating to the use of water for the purpose of mining activities and the related impact on water resources”, and was satisfied Coal of Africa had met requirements.

However, Coal of Africa was required within three months to submit three plans showing areas in which mining would take place so as to protect the Limpopo River and its tributaries; rehabilitation measures to be undertaken on three tributaries that had already been negatively affected; and changes of water courses to minimise pollution.

The company was also required to establish a monitoring forum including water specialists, interested and affected parties, civil society and local government.

“This forum must meet regularly and is expected to continue to be in force as long as it is necessary. The outcome of the meetings of the forum will form part of the quarterly reporting to the department as per licence stipulation.”

Wallington blamed all parties, including Coal of Africa, for the impasse at Vele. The company “should have been more sensitive” about the location; the government “should have been more on top of things” with greater inter-departmental interaction; and civil society groups “could have been more proactive earlier”.

Coal of Africa has invested R600 million at Vele and, Wallington estimated, R20m to R30m in other expenses.

Wallington called for the government to urgently designate areas where mining would be banned or restricted ahead of a Mineral Resources Department target to do so by 2015.

“They need to do it now… If it had been sorted out properly, we wouldn’t have this problem,” he said, echoing a call made by NGOs opposed to mining in the area.

Wallington denied the NGOs’ claims that Coal of Africa had a bad record on environmental compliance, and said the group was proceeding with a rectification process at Mooiplaats colliery in Mpumalanga, where a pre-directive was issued last year for environmental non-compliance.

He said he had taken “a lot of flak” for his decision to proceed with rectification processes, which technically involved admission of guilt. “We weren’t on moral high ground at the time,” he said of the decision not to enter into a dispute with the Department of Environmental Affairs. The company conceded that it “was in the middle of its water use licence application when the directive was issued”.